Federal Court Bars Medi-Cal Cuts

California doctors won't face pay cuts for treating the poor

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There are many potholes on the road to trying to balance California's troubled state budget. And Gov. Jerry Brown just hit one.

U.S. District Judge Christina Snyder issued a final ruling on Wednesday, blocking the state from making a 10 percent cut to Medi-Cal reimbursement rates.

In simple terms, that means doctors, dentists, and other medical professionals won't see their pay slashed for treating the state's poor.

The ruling comes from a lawsuit filed by the California Medical Association and other groups.

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"This is tremendous news for the future of medicine," CMA President James Hay said in a statement. "Rather than focusing on Medi-Cal cuts as a short-term budget solution, we should be working together to find long-term solutions."

The cuts would have affected clinics, labs, and pharmacies. Doctors were seen as less likely to take on Medi-Cal patients, if the reimbursement cuts had been made. Rural areas were especially worried about the impact.

But the issue creates a new headache for Gov. Brown, who signed the Medi-Cal cut bill last year as part of an ongoing effort to find savings. Cutting reimbursements would have saved the state an estimated $623 million.

The ruling means the governor's budget people will now have to slash spending elsewhere to make up for it.

These kinds of decisions illustrate the ongoing nature of California's budget quicksand. It's one reason for State Controller John Chiang's warning this week that the state is facing a cash shortage this spring.